In this article, we will analyze a series of covered call trades shared with me by a BCI premium member. These trade executions involve establishing a bullish covered call position, then rolling-down and then rolling-out. All of our trades serve as learning opportunities and these ELV trades are no exceptions. ELV trades from 11/7/2022 […]
BCI PODCAST 104: Special 1 Time Dividends and Contract Adjustments
Watch Video: Listen To Audio Version: Special 1-time cash and equity dividends will result in option contract adjustments. The Options Clearing Corporation (OCC) will make the alterations such that buyers and sellers of calls and put remain “whole” Ticker symbols and deliverables may change or tickers may stay the same while strikes are reduced. 2 […]
Analyzing a Covered Call Trade Over 2 Expiration Cycles: A Rea-Life Example with Interactive Brokers Group (Nasdaq: IBKR)
Covered call writing exit strategies can involve trade adjustments over 1 or more expiration cycles. This article will analyze a series of trades shared with me by Ken, where the share price of IBKR declined after entering the trade and a decision to retain the shares for the next cycle and the (now) out-of-the-money call […]
Multiple Applications of the Mid-Contract Unwind (MCU) Exit Strategy: A Real-Life Example with Super Micro Computer, Inc. (Nasdaq: SMCI)
Covered call writing exit strategies allow us to mitigate trade losses and enhance trade profits. On 11/30/2022, Paul shares with me a series of trades he executed with SMCI where a trade turned against him, and he wasn’t sure how to enter it into the BCI Trade Management Calculator. Both legs of the covered call […]
Ask Alan 206: 20%/10% Guidelines for In-The-Money Strikes
Alan answers a question posed by Ken, who asks: Alan, In the BCI system, do we apply the 20%/10% guidelines the same way for ITM calls as when selling OTM calls? For OTM, it is based only on extrinsic-value. For ITM, is it based on the entire premium or just the extrinsic-value of the premium? […]
Application of the 20%/10% Guidelines for ITM & OTM Strikes + Registration Form for Thursday’s Webinar
One of the key methods to partially automate our covered call writing exit strategy arsenal is to place buy-to-close (BTC), good until cancelled (GTC) limit orders to close our short calls based on our BCI 20%/10% guidelines. We instruct our broker to buy back the short call if the value reaches 20% (in the 1st […]
BCI PODCAST 103: The Collar Strategy Using Long-Term Put Expirations
Watch Video: Listen To Audio Version: This podcast discusses the pros and cons when using longer-term put expirations with our collar trades. These are covered call writing trades with additional protective puts. The BCI Collar Calculator will assist with the trade returns which, on the surface, appear impressive but the negatives will also be discussed. […]
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Analyzing a Defensive Turned Aggressive Covered Call Trade: A Real-Life Example with Select Sector SPDR Utilities (NYSE: XLU)
When we craft our covered call trades, we must decide if a defensive (in-the-money or ITM calls) or aggressive (out-of-the-money or OTM) position should be established. We base this on overall market assessment, chart technical pattern and personal risk-tolerance. We should also have a plan in place should share value move up or down significantly […]
BCI PODCAST 102: Analyzing Market Assessment Based on Portfolio Setup
Watch Video: Listen To Audio Version: This podcast represents an analysis of the investor’s thought process based on examination of the stocks and options selected for this covered call writing portfolio. Included in the podcast are discussions of personal risk-tolerance, implied volatility, initial time-value returns, the “moneyness” of options, price charts and calculations with the […]
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The Poor Man’s Covered Call: How to Re-Structure a Potentially Losing Trade into a Winning One
The Poor Man’s Covered Call is a covered call writing-like strategy where a LEAPS option is used as a surrogate for the actual stock or exchange-traded fund (ETF). When structuring our PMCC trades, we must make sure it aligns with our required initial structuring formula. This will allow us to close our PMCC trades at […]
Podcast
- 104. Special 1 Time Dividends and Contract Adjustments
- 103. The Collar Strategy Using Long-Term Put Expirations
- 102. Analyzing Market Assessment Based on Portfolio Setup
- 101. Covered Call Writing: "Hitting a Double" on the Last day of a Contract
- 100. Analyzing LEAPS for The Poor Man's Covered call Strategy (PMCC)
- 99. Anatomy of a Reverse Stock Split
- 98. Analyzing LEAPS Options for the Poor Man's Covered Call
- 97. Managing Our Poor Man's Covered Call Trades When Share Price Drops Substantially
- 96. Protecting Our Covered Call Trades: Protective Puts and In-the-Money Strikes
- 95. Covered Call Writing to Generate Premium and Dividend Income
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